Selling house and start renting. Good idea?

lisso68

hello
I am thinking of selling my property (3 beds end terrace) in a not so good suburban area of Chester. It has been valued at around 125k, I would make a profit of ~90k after paying off the mortgage, and considering what many experts are saying about a very possible housing crash (ie. Martin here, and Cliff D'Arcy of Fool.co.uk, see his article http://www.fool.co.uk/news/comment/2006/c060928a.htm?source=ioowftxt0010011)
I would then stick the cash in a high interest savings account and/or investments, shares etc and renting perhaps a 2 beds apartment out of town (I am free, no wife and kids to think of )
This would cost me 500+ a month, partly covered by the interests on savings.
Eventually when I'm ready and the housing prices have collapsed, I would buy a new house, my question is... if this doesn't happen and the prices keep going up for the foreseeable future, then my money in the bank would have lost most of its value in the property market.
Any advice?
Thanks

Tassotti

I remember when people started STRing back in 2003. Not one of them has managed to purchase a house again yet, as even though this crash is happening right now, strangely the market is still stable and even rising in some areas.I am sure this post will see all of the HPC lot crawling out of the woodwork, telling you its a great idea as the crash will happen soon.I, personally, think it is financial suicide what you are contemplating, and if you do this you will never own a house again.But then, do you really care.Sod it sell up and blow the 90K on wine, women and song

cattie

I think you have to weigh up how important owing your own property is to you. If you found yourself in the position of renting & house prices never do plunge to the levels people keep dreaming about, would you be kicking yourself for having sold in the first place & would you be happy to be a tenant indefinitely, perhaps forever?

Gorgeous_George

It's a gamble, obviously.

Sell up and if

1) Prices rise. You may never be able to own your own home again. Not a problem if you are comfortable with that.

2) Prices fall. Woohoo! You could be in a position to buy your old house back without needing a mortgage and could have a few grand left over.

Keep your home and if

1) Prices rise. You could decide to sell up later and be better off.

2) Prices fall. You'll probably feel as if you lost money nd in a way, you would be right. But, you'd still own your own home.

It's like a game of Deal or No Deal, don't you think? Whenever I've watched the game, I always think I'd deal when the offer is enough to justify being on the telly with Noel Edmonds - about £10,000.

If I used the same logic,I'd be renting tomorrow.



GG

loveandlight

I believe there will never be another housing crash. There are far too many people who have vested interests in property and far too many people at the top end of the wealth scale with tremendous amounts of influence and power who just simply wouldn't allow it. Otherwise they would lose obscene amounts of money as a result.

Many many people would go bankrupt overnight and hoards of companies and financial institutions would go bust. For those reasons alone it will never happen again. Slow down for a while yes but the bottom will never drop out of the market again.

Entertainer

I remember people saying prices were going to fall in 2000. Prices have rocketed since then.

I remember respected institution:rotfl: Capital Economics predicting a 20% fall 3 years ago and guess what, that didn't happen either.

Those prices keep on rising.

I believe there will never be another housing crash. There are far too many people who have vested interests in property and far too many people at the top end of the wealth scale with tremendous amounts of influence and power who just simply wouldn't allow it. Otherwise they would lose obscene amounts of money as a result.

Many many people would go bankrupt overnight and hoards of companies and financial institutions would go bust. For those reasons alone it will never happen again. Slow down for a while yes but the bottom will never drop out of the market again.

You forget how markets work. You could have made exactly the same argument in the late 80's. Wanting something to happen is not what causes events.

The simple reason (and it really is very simple) why house prices are so high and seem to be staying that way, is because we are in an incredibly low inflation environment at the moment. This is due to the enormous manufacture of cheap goods in the developing world (largely China). That means low interest rates and it is those which are supporting the market and indeed the economy.

loveandlight

This is my opinion and I'm sticking to it!!

Entertainer

Well then we'll have to agree to disagree then.;)

loveandlight

Agreed!:beer: